At $2.8 Million, Beti-cel Is a Canary in the Drug Cost Coal Mine

Christina Frangou

October 07, 2022

How much can a company charge for a one-time therapy that may cure a debilitating genetic disease?

The answer for drugmaker Bluebird Bio: $2.8 million.

In August, after receiving FDA approval, the Massachusetts-based company set the multimillion dollar price tag for its gene therapy, betibeglogene autotemcel (Zynteglo) or beti-cel for short.

Beti-cel is a single-dose treatment for beta-thalassemia — a blood disorder that drastically reduces production of hemoglobin due to a mutation in the beta-globin gene.

In August, beti-cel was the most expensive single-treatment therapy approved in the United States. The previous record for a single-dose gene therapy was $2.1 million for onasemnogene abeparvovec (Zolgensma), a gene therapy used to treat spinal muscular atrophy in children under age 2.

Jess Rowlands, a spokesperson for Bluebird, said the price reflects beti-cel's "potentially curative benefit" for patients with beta-thalassemia who would otherwise require frequent and expensive therapy over their lifetime.

"We really looked at and priced Zynteglo based on the profound benefit it has for patients," said Rowlands.

Many patients with this inherited disorder need red blood cell transfusions every 2 to 5 weeks, in addition to iron chelation therapy, which can cost about $6.5 million over patients' lives, according to the company. Patients with infusion-dependent disease typically die before age 40.

An estimated 1500 Americans would be eligible for beti-cel, which is made specifically for each individual. The therapy uses a patient's own blood stem cells alongside functional copies of the beta-globin gene.

The FDA's approval was based on two clinical trials in which 89% of patients (32 of 36) who received beti-cel were no longer dependent on transfusions 1 year after treatment.

The $2.8 million cost "is an incredibly shocking number to think about, but it's also a durable therapy, which you administer once and you get the benefits for many years," said Mark Trusheim, MSc, strategic director of NEWDIGS, a health system innovation consortium at Tufts Medical Center in Boston.

Paying for the Therapy?

In Europe, where the cost of beti-cell was set at $1.8 million, regulators balked at the price, leading Bluebird to withdraw it from the continent in 2021.

In the US, the affordability of beti-cel remains a concern. To help offset the cost, Bluebird is offering an outcomes-based agreement for the gene therapy. Payers, for instance, will be reimbursed up to 80% of the therapy's cost for patients who continue to require transfusions after treatment. The cutoff, however, happens at 2 years, which may not be long enough to assess the therapy's effectiveness given that the beti-cel trials only tracked the therapy's efficacy in a few dozen patients for an average of 3.5 years.

Another strategy will be to allow insurers and others to pay for the drug in installments, though again the specifics remain unclear.

Rowlands said the company has contracts in place with several national pharmacy benefit managers representing "dozens of plans" and are in late-stage negotiations with several others, but noted she could not provide details of these reimbursement contracts with payers. 

Only two major insurers confirmed to Medscape Medical News that they will cover beti-cel. Elevance Health, an expansive managed care company that boasts 46.8 million members, said it will cover the gene therapy when medically necessary.

Evernorth, which is part of Cigna's health services portfolio, has added beti-cel to its Embarc benefit protection. A spokesperson for Evernorth said the treatment is now available to patients whose plan sponsors are enrolled in the Embarc program, which the company says "helps ensure access to breakthrough gene therapy drugs while offering protection from high costs."

Still, it is unclear how much patients will pay out-of-pocket for the therapy, and whether patient costs will be reimbursed if beti-cel is unsuccessful. Much depends on the specifics of a person's insurance and how hospital stays are covered.

Benjamin Rome, MD, MPH, a health policy researcher at Harvard Medical School in Cambridge, Massachusetts, said he is concerned about how much of the cost will fall to patients. The therapy may offset the lifetime expenses associated with conventional therapy, but beti-cel condenses the cost into one up-front payment, which may be a considerable struggle for patients and payers, he said.

In addition, the costs associated with beti-cel go beyond the therapy itself. Patients are admitted to the hospital to undergo chemotherapy for a few days and then receive the beti-cel infusion. Patients must remain in the hospital for 1-2 months to protect against infection.

Under some policies, patients pay a per-diem rate for care during their hospital stay, said Rowlands. Some patients will be covered by the annual out-of-pocket maximum cap established under the Affordable Care Act, she added.

Patients with beta-thalassemia have also expressed concerns about accessibility.

Maria Hadjidemetriou, a patient advocate who has beta-thalassemia, decided not to pursue gene therapy because she says her illness is well-managed with blood transfusions. But she worries what the high cost of the gene therapy will mean for most patients, particularly those living outside the US.

Surveys suggest that worldwide about 23,000 infants are born with beta-thalassemia requiring frequent blood transfusions, the vast majority of whom live in low- and middle-income countries. Some of these patients struggle to access basic blood transfusions, suggesting gene therapy will be impossible for these patients, Hadjidemetriou said.

"I know [most] beta-thalassemia patients will be cured by the gene therapy, but it's going to be the ones who can afford it," said Hadjidemetriou. "There needs to be something for other patients, as well as in the developing countries. We can't leave them behind."

Justifying the Price Tag

In July, before the FDA approval, the Institute for Clinical and Economic Review (ICER) reported a range of prices at which beti-cel would be cost-effective under a range of scenarios. These prices ranged from the European price of about $1.8 million and maxed out at $3 million.

ICER also said beti-cel met value thresholds for cost-effectiveness at Bluebird's initial suggested price tag of $2.1 million, if this scenario included a payback option for patients who did not maintain transfusion independence.

David Rind, MD, MSc, chief medical officer for ICER, said the price, though ultimately higher than initially expected, will not "break the bank" for payers or add major stress on the healthcare system. "There just aren't enough people with beta-thalassemia for it to do that," he said.

In addition, among the 1500 or so patients in the US with beta-thalassemia who depend on frequent infusions, not all will seek the gene therapy.

But Rind worries about how the therapy's price will influence the pricing of other gene therapies coming down the pipeline, including several that will be used to treat diseases affecting much larger numbers of patients.

The concern is warranted.

Prices for news drugs, especially in oncology, have ballooned in recent years. Between 2008 and 2021, launch prices for new drugs increased exponentially by 20% per year. In that time, six drugs had launch prices exceeding $1 million per year.

And in September, one month after the approval of beti-cel, the FDA granted an accelerated approval to a second gene therapy from Bluebird — elivaldogene autotemcel (Skysona), also known as eli-cel, which slows the progression of neurologic dysfunction in boys ages 4-17 with early, active cerebral adrenoleukodystrophy, also known as CALD.

The company set the wholesale acquisition cost of eli-cel at $3 million.

And there's more. Bluebird is testing another gene therapy — this one will be for patients with sickle cell disease, which affects about 100,000 people in the US.

"My biggest concern for some of these products is that they ultimately are going to fall to state Medicaid programs for a lot of the patients who need them, and state Medicaid programs are budget-constrained," Rome said.

Experts in drug pricing have suggested that the US consider innovative approaches to coverage as more high-priced therapies are approved.

Rind, for instance, noted that Bluebird could potentially slash the price of beti-cel by almost half —$1.3 to $1.8 million — instead of $2.8 million, by not basing its price on the cost of previous treatments that the new therapy would offset.

"It's not so clear to me why manufacturers shouldn't kick in some of the good for society," Rind said. "Do they need to make hundreds of billions? Trillions?"

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